San Diego Mayor Bob Filner and the city's hoteliers have resumed their feud over the release of tourism marketing funds, a little more than a week after an accord was reached.

The City Council had been poised on Tuesday to finalize an agreement that would pave the way for millions of dollars in funds to be spent on marketing the city, but Filner said the proposed language leaves the city's general fund at great risk should the Tourism Marketing District be found illegal.

A 2 percent hotel room charge that is used to finance tourism promotion via a special citywide assessment district is being challenged in three lawsuits filed against the city. Those suits are not likely to be resolved for months, if not a year.

The council voted unanimously to continue the matter until Monday but vowed to make a decision then even if a consensus cannot be reached in the interim.

"We need all the parties, the city attorney, mayor and the TMD (Tourism Marketing District) to provide us with draft amendment language to see a way forward out of this mess -- and make no mistake, this is a mess," said Councilwoman Sherri Lightner. "This is hurting everyone, most of all the taxpayers who have elected us to lead."

At stake is $30 million a year in marketing money that is generated by the hotelier-run district. The city's Tourism Authority, which relies on the funds for 80 percent of its budget, already has canceled more than $8 million in television advertising at a time when other major cities are promoting themselves for the summer traveling season.

The agency is also facing layoffs of nearly all its staff if funding does not become available by early May. Layoff notices already have been issued.

While some council members were unsure as to whether all the parties could reach an agreement, they encouraged them to resume negotiations. Although the council had previously passed a resolution ordering Filner to sign an operating agreement for the marketing district, it believed that the mayor and the hotel industry had reached an accord that would no longer lead to further confrontation. A mayoral veto of that action is still possible on Thursday, the deadline for Filner to take such an action.

Addressing the council, Filner was insistent that the hoteliers step up and indemnify the city against all potential losses, not just the funds their individual hotels contribute toward marketing. Under language agreed to by the TMD, at least 20 of the largest hotels would indemnify the city against refunds to hotel guests if the marketing fee is overturned. The city would release only as much of the funds as are covered by such hotel agreements.

"I put forward what I thought we memorialized," Filner said. "I have signed that. My indemnification protects every single nickel that the city may be on the line for. They’ll tell you there’s little risk for the city. If there’s little risk, why not sign the agreement."

Terry Brown, chairman of the marketing district board, said that while the board is willing to continue negotiating, it cannot agree to the indemnification demands Filner is making.